Mental Health Practice Valuation
Mental Health Practice Valuation Calculator & Exit Planning Built for Therapists
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Most Mental Health Practice Owners Have No Idea What Their Business is Actually Worth
Current Mental Health Practice Valuation Multiples (2026)
Mental health practice values have surged due to demand growth and PE consolidation. Here's the current market:
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What Actually Drives Mental Health Practice Value
A full caseload doesn't automatically mean a valuable practice. Sophisticated buyers evaluate these factors that most practice owners overlook:
Provider Count
3+ Licensed Clinicians
Solo practices have limited value beyond owner earnings. Group practices with multiple providers demonstrate scale and reduce key person risk.
Solo practice = personal goodwill only
Payer Diversification
Mixed Insurance + Private Pay
A balanced mix of commercial insurance, Medicare/Medicaid, and private pay provides stability. Over-reliance on any single payer creates risk.
Single payer = rate risk
Referral Sources
Multiple Channels
Practices with diverse referrals—physicians, EAPs, schools, self-referral—are more stable than those dependent on a single source.
One referral source = concentration risk
Service Lines
Multiple Specialties
Individual therapy, group therapy, psychiatric services, and specialty programs (substance abuse, eating disorders) make practices more attractive.
Single modality = limited appeal
Telehealth
Hybrid Model
Post-COVID, buyers expect robust telehealth capability. Hybrid practices demonstrate adaptability and can reach clients beyond geographic limits.
No telehealth = behind the curve
Owner Caseload
Reduced Clinical Hours
Owners carrying full caseloads limit practice value. Transition to oversight, quality assurance, and growth while delegating clinical work.
Full owner caseload = key person risk
How to Value a Mental Health Practice
The U.S. mental health services market includes over 250,000 therapists and counselors across tens of thousands of practices, generating approximately $30 billion in annual revenue. The demand for mental health services has surged post-COVID, making this an increasingly attractive acquisition market.
Seller's Discretionary Earnings (SDE) is the primary valuation method for mental health practices. Practices typically sell for 1.5x to 3.0x SDE, with group practices employing multiple therapists commanding the higher end. Solo practitioner practices where the therapist-owner provides all services are the most challenging to value because the client relationships are deeply personal.
Revenue multiples for mental health practices generally range from 0.40x to 0.80x annual collections. Practices with diversified service offerings (individual therapy, group therapy, psychological testing, medication management through psychiatric providers) achieve higher multiples.
The unique valuation challenge in mental health is the therapist-client relationship and transferability. Mental health clients form deeply personal bonds with their therapists, and client retention through an ownership transition is the primary risk buyers evaluate. Practices with multiple therapists, centralized intake processes, and a group practice model where clients identify with the practice brand rather than an individual therapist transfer value far more effectively. Insurance credentialing panels and EHR systems are also transferable assets.
The mental health sector has seen growing PE interest, with platforms like Ellie Mental Health, Lifestance Health, and Refresh Mental Health driving consolidation. The ongoing demand-supply imbalance in mental health services supports strong valuations. Use our free calculator above to get your instant estimate, then track your value monthly with YourExitValue.
Frequently Asked Questions
What multiple do mental health practices sell for?
Solo practices typically sell for 1.5x – 2.5x SDE. Group practices with multiple clinicians can command 3x – 4.5x SDE or 5x – 9x EBITDA. Provider count is the single biggest factor in multiples.
Why is PE interested in mental health practices?
PE sees mental health as a high-growth sector: increased demand, insurance parity laws, telehealth expansion, and a fragmented market ripe for consolidation. PE-backed platforms are actively building regional behavioral health networks.
Can I sell a solo mental health practice?
Yes, but expect a lower multiple (typically 1.5x – 2x SDE). Solo practice value is largely personal goodwill. Consider bringing on associate clinicians before selling to increase value—it can add 50% or more.
How does payer mix affect my practice value?
Diversified payer mix reduces risk. Practices dependent on a single carrier or Medicaid face reimbursement rate risk. A balanced mix of commercial, Medicare, Medicaid, and private pay is most attractive.
What makes a mental health practice attractive for acquisition?
Multiple licensed providers, diverse service lines, strong referral networks, telehealth capability, documented clinical protocols, and an owner who has transitioned from full-time clinical work to management.
How important is telehealth for mental health practice value?
Very important post-COVID. Buyers expect robust telehealth infrastructure. Hybrid practices with in-person and telehealth options demonstrate adaptability and can serve clients beyond immediate geography.